Moorabbin Airport Corporation Pty Ltd and Minister for Infrastructure and Regional Development Kingston City Council JOINED PARTY City of Greater Dandenong JOINED PARTY - [2015] AATA 77

[2015] AATA 77

Division

GENERAL ADMINISTRATIVE DIVISION

File Number

2013/4302

Re

Moorabbin Airport Corporation Pty Ltd

APPLICANT

And

Minister for Infrastructure and Regional Development

RESPONDENT

And

Kingston City Council

JOINED PARTY

And

City of Greater Dandenong

JOINED PARTY

DECISION
Tribunal  Justice S Kenny, Presidential Member
Date:  17 February 2015
Place  Melbourne
1.        The Tribunal affirms the decision under review.
……………………[sgd]………………………………
Justice S Kenny, Presidential Member
CATCHWORDS
AVIATION – Airports – decision by Minister to refuse to approve draft major development plan under s 94(2) of Airports Act 1996 (Cth) – application by airport-lessee company for review of decision – proposed development “relates to” airport within s 91(1A) – approval of draft major development plan would defeat statutory purpose in s 91(1A), where airport-lessee company no longer able to implement the draft major development plan in accordance with the details of the development set out in it – evidence predicated on a particular retail tenancy mix – basis for assumption as to tenancy mix no longer exists – Tribunal unable to assess economic impacts of development adequately – consideration of matters mandated by s 94(3) – matters mandated by s 94(3) do not provide a reason not to approve draft major development plan – consideration of the likely effect of traffic flows, the likely effect of the proposed development on the local and regional economy and community, how the proposed development fits within the local planning schemes for commercial and retail development, the extent of consistency with the planning schemes, and the justification for any inconsistencies – consideration of last-mentioned matters not provide a reason not to approve the draft major development plan – decision under review affirmed.
LEGISLATION
Airports Act 1996 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth)
Airports (Transitional) Act 1996 (Cth)
Airports Amendment Act 2010 (Cth)
Airports Amendment Act 2007 (Cth)
Airport Regulations 1997 (Cth)
CASES
Re Moorabbin Airport Corporation Pty Ltd and Minister for Infrastructure and Regional Development and Ors [2014] AATA 101
Direct Factory Outlets Pty Ltd v Westfield Management Ltd (No 2) (2005) 144 FCR 23
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Shi v Migration Agents Registration Authority (2008) 235 CLR 286
Jinalec Park Pty Ltd v Mornington Peninsula SC [2007] VCAT 1238
Boucher v Dandenong Ranges Steiner School Incorporated [2005] VSC 400; (2005) 145 LGERA 21
PMT Partners Limited (in liquidation) v Australian National Parks and Wildlife Service (1995) 184 CLR 301
Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602
Joye v Beach Petroleum NL (1996) 67 FCR 275
Australian Securities and Investments Commission v Citrofresh International Ltd (2007) 245 ALR 47
Doomadgee v Deputy State Coroner Clements [2006] 2 Qd R 352
Westfield Management Ltd v Brisbane Airport Corporation [2005] FCA 32
Re Heaney and Commissioner of Taxation (2013) 138 ALD 144
SECONDARY MATERIALS
Explanatory Memorandum, Airports Amendment Bill 2006 (Cth)
Explanatory Memorandum, Airports Amendment Bill 2010 (Cth)
Commonwealth, Parliamentary Debates, House of Representatives, 30 September 2010, 262 (the Hon Anthony Albanese, Minister for Infrastructure and Transport)
Commonwealth, Parliamentary Debates, House of Representatives, 30 November 2006, 1 (Mrs De-Anne Kelly, Parliamentary Secretary to the Minister for Transport and Regional Services)
REASONS FOR DECISION
Justice S Kenny, Presidential Member
17 February 2015
INTRODUCTION
The decision under review

The decision under review is the decision made by the responsible Minister under s 94(2)(b) of the Airports Act 1996 (Cth) (Act) to refuse to approve a draft major development plan (dMDP), which was submitted by Moorabbin Airport Corporation Pty Ltd (MAC) on 16 May 2013 (Decision). The Decision was made on 5 August 2013. The dMDP outlined a proposed development, called the Wesfarmers Group Project (also referred to below as the Wesfarmers Project), which involved the construction of a retail shopping complex to be leased by members of the Wesfarmers Group at the north-eastern portion of the Airport. The proposed shopping complex was to consist of a supermarket, a discount department store (DDS), a packaged liquor outlet, an office supplier and an auto service centre.
On 27 August 2013, MAC applied to the Administrative Appeals Tribunal (Tribunal) for review of the Decision pursuant to s 242 of the Act and s 29 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act).
The Tribunal would affirm the Decision under review. In summary, the Tribunal would not approve the dMDP at this stage of its history because there is no basis to suppose that MAC is able to implement the dMDP in accordance with the detailed outline of the development that it contains, being the details of the development that, if approved, the major development plan was supposed to establish. In the circumstances outlined below, to approve the dMDP would defeat the statutory purpose of a major development plan as stated in s 91(1A), the purpose of the requirement in s 91(1)(c) for a detailed outlined of the development, and of the approval requirement in s 94(2) of the Act: see below at [241]-[248]. Furthermore, since most of the evidence before the Tribunal on the likely economic impacts of the development proposed by the dMDP was predicated on the particular retail tenancy mix outlined in the dMDP and did not address another retail development, with a different retail mix, the Tribunal could not be satisfied as to the likely effect of the proposed development on the local and regional economy; and whether the economic advantages of the proposal so outweighed the economic disadvantages that the economic advantages might be included in the justification for any inconsistency between the dMDP and the local planning schemes: see below at [249]-[255]. Putting these conclusions to one side and assuming that, if approved, MAC would implement the dMDP in accordance with the details of the development that it outlines, the Tribunal does not consider that the mandated matters in s 94(3) of the Act would be a reason not to approve the dMDP: see below at [256]-[264]. Further, the Tribunal does not consider that, on the evidence before it, the other matters discussed hereafter (the likely effect of traffic flows, the likely effect of the proposed development on the local and regional economy and community, how the proposed development fits within the local planning schemes for commercial and retail development, the extent of consistency with the planning schemes, and the justification for any inconsistencies) would be a reason not to approve the dMDP: see below at [265]-[298].
The parties
MAC is the applicant for review. MAC is incorporated in Victoria, with its registered office in Sydney, New South Wales. Relevantly here, MAC is the lessee under a lease over the Moorabbin Airport (Airport).
The Airport is 21 kilometres south-east from the Central Business District of Melbourne and is approximately 294 hectares in area. The Airport is owned by the Commonwealth of Australia (Commonwealth). On 18 June 1998, the Commonwealth granted MAC the lease over the Airport for a term of 50 years (Lease) pursuant to the Airports (Transitional) Act 1996 (Cth).
The Commonwealth Minister for Infrastructure and Regional Development (Minister) is responsible for administering the Act and is the respondent to this application for review. The current Minister, the Hon Warren Truss, does not support the Decision under review, which was made by the former Minister (see below), and submits that the preferable decision is that the Decision be set aside and a decision made under s 94(2)(a) of the Act to approve the dMDP. The Minister’s position was conveyed to the Tribunal shortly before the hearing, by letter dated 14 August 2014, in compliance with the Tribunal’s directions of 11 August 2014. The Minister’s position was confirmed in closing submissions filed on 15 September 2014.
Further, as outlined below, in opening submissions filed on 18 August 2014, shortly before the hearing was to commence, the Minister also informed the Tribunal that he had approved a draft major development plan (Costco MDP) in relation to the Airport that provided for the construction of a Costco store on the Airport’s land (Costco Project). This has ramifications for the reports and evidence of some expert witnesses in this case.
Also on 18 August 2014, shortly before the commencement of the hearing, the Minister informed the Tribunal in his opening submissions that, on 15 August 2014, the Minister’s solicitors had been advised that MAC:
… does not, at present, have an agreement with any tenant (including Wesfarmers) to occupy the development proposed in the dMDP. [MAC] is not aware whether the approval of the Costco development affects the intentions of … Wesfarmers or any other potential tenant to seek to enter into an agreement.
This information also had ramifications for the reports and evidence of some expert witnesses and, for the reasons set out below, affects the Tribunal’s decision.
Kingston City Council (Kingston CC) is responsible for the administration and enforcement of the City of Kingston Planning Scheme (Kingston PS) and is the first joined party. The City of Greater Dandenong (Greater Dandenong CC) is responsible for the administration and enforcement of the City of Greater Dandenong Planning Scheme (Greater Dandenong PS). The Greater Dandenong CC is the second joined party: see Re Moorabbin Airport Corporation Pty Ltd and Minister for Infrastructure and Regional Development and Ors [2014] AATA 101.
BACKGROUND CIRCUMSTANCES
The circumstances in which MAC submitted the dMDP for approval are not contentious. In addition to the Act and the Airport Regulations 1997 (Cth) (Regulations), the use and development of land at the Airport is regulated by the Lease, the Airport’s current Master Plan, any approved Major Development Plan and, potentially, the dMDP. I discuss the Lease, the Master Plan and the dMDP first, before turning to other contextual circumstances. The only approved Major Development Plan said to be relevant was the Costco MDP, discussed hereafter.
The Lease
The Lease granted by the Commonwealth to MAC over the Airport states that MAC must “provide for the use of the [Airport] as an airport” and may “permit the [Airport] to be used for other lawful purposes that are not inconsistent with its use as an airport” (cl 3.1(a)(i) and cl 3.1(b)(i)): compare Direct Factory Outlets Pty Ltd v Westfield Management Ltd (No 2) (2005) 144 FCR 23 (Direct Factory Outlets) at 42 [51] (Cooper J).
Further, cl 13.1 of the Lease obliges MAC to “develop the [Airport] at its own cost and expense” having regard to:
(a)the actual and anticipated future growth in, and pattern of, traffic demand for the [Airport];
(b) the quality standards reasonably expected of such an airport in Australia; and
(c) Good Business Practice.
The 2010 Master Plan and the governing legislative regime
The Airport is subject to Pt 5 of the Act and the Regulations: see s 68(1)(b) of the Act and reg 5.01A(d) of the Regulations. The Airport is also declared to be an airport site within the meaning of s 5 of the Act: reg 1.03(1)(o). Part 5 (constituted by ss 67 to 112A) relates to land use, planning and building controls.
In conformity with s 70 (in Pt 5), the Airport has a final master plan – the Moorabbin Airport Master Plan – which received Ministerial approval under s 81(2)(a) in June 2010 (2010 Master Plan). At the time the 2010 Master Plan was approved, s 70(2) of the Act stated that the purposes of a master plan were:
(a)to establish the strategic direction for efficient and economic development at the airport over the planning period of the plan; and
(b)to provide for the development of additional uses of the airport site; and
(c)to indicate to the public the intended uses of the airport site; and
(d)to reduce potential conflicts between uses of the airport site, and to ensure that uses of the airport site are compatible with the areas surrounding the airport.
The Act, including s 70, was amended in 2010: see Airports Amendment Act 2010 (Cth) (No 149 of 2010). The discussion of the dMDP below has regard to the Act, in its amended form.
Section 71 specified the matters that were required to be set out in a draft or final master plan for an airport: see s 71(1). At the time of the 2010 Master Plan, s 71(2) provided:
(2)In the case of an airport other than a joint-user airport, a draft or final master plan must specify:
(a)the airport-lessee company’s development objectives for the airport; and
(b)the airport-lessee company’s assessment of the future needs of civil aviation users of the airport, and other users of the airport, for services and facilities relating to the airport; and
(c)the airport-lessee company’s intentions for land use and related development of the airport site, where the uses and developments embrace airside, landside, surface access and land planning/zoning aspects; and
(d)an Australian Noise Exposure Forecast (in accordance with regulations, if any, made for the purpose of this paragraph) for the areas surrounding the airport; and
(da)flight paths (in accordance with regulations, if any, made for the purpose of this paragraph) at the airport; and
(e)the airport-lessee company’s plans, developed following consultations with the airlines that use the airport and local government bodies in the vicinity of the airport, for managing aircraft noise intrusion in areas forecast to be subject to exposure above the significant ANEF levels; and
(f)the airport-lessee company’s assessment of environmental issues that might reasonably be expected to be associated with the implementation of the plan; and
(g)the airport-lessee company’s plans for dealing with the environmental issues mentioned in paragraph (f) (including plans for ameliorating or preventing environmental impacts); and
(h)if a draft environment strategy for the airport has been approved—the date of that approval; and
(j)such other matters (if any) as are specified in the regulations.
Section 71(6) further provided:
In specifying a particular objective or proposal covered by paragraph (2)(a) or (c) …, a draft or final master plan must address the extent (if any) of consistency with planning schemes in force under a law of the State or Territory in which the airport is located.
Currently, a draft or final master plan must relate to a 20-year period (s 72(1)), although, pursuant to s 77(1), “[a] final master plan remains in force for 5 years. However, if, at the end of that 5 years, a fresh final master plan does not come into force, the original plan remains in force until a fresh plan comes into force”. Pursuant to s 76(1)(a) of the Act, MAC is required to give the Minister a new draft master plan for the Airport by no later than June 2015 (being 5 years after the original plan came into force) unless the Minister specifies a longer period under s 76(1)(b).
At the relevant time, s 81 of the Act, concerning the Minister’s approval of a draft master plan, provided that, if an airport-lessee company gave the Minister a draft master plan, then the Minister had either to approve the plan or refuse to approve the plan: see ss 81(1) and (2). Section 81(3) further provided that, in giving or refusing to give, approval, the Minister was obliged to have regard to various matters, including:
…
(a)the extent to which carrying out the plan would meet present and future requirements of civil aviation users of the airport, and other users of the airport, for services and facilities relating to the airport concerned;
(b)the effect that carrying out the plan would be likely to have on the use of land:
(i) within the airport site concerned; and
(ii) in areas surrounding the airport.
…
As Cooper J said in Direct Factory Outlets (at 42 [52]), a master plan consists of specific proposals “falling within the general range of permissible uses of the airport site”. His Honour then went on to say in the same paragraph that the Minister exercises control over the land use and development at an airport subject to Pt 5 of the Act, by approving, or refusing to approve, a master plan under s 81 and that:
Once approved the final master plan controls land use and related development at [such an airport] by limiting it to development which is consistent with what has been approved in the final master plan.
The 2010 Master Plan is in two Parts: Pt A sets out the broad policy framework and Pt B sets out the implementation framework, including controls and decision-making criteria for land use and development at the Airport. Within Pt A, the 2010 Master Plan records that MAC’s vision for the Airport is:
To continue to develop an efficient and fully functioning Airport of Regional and State significance, supported and enhanced by quality land use, which will significantly contribute to and improve and support the operation and growth of the airport and the economic and social base of south eastern metropolitan Melbourne, particularly its local community.
The 2010 Master Plan refers to numerous key strategic policy considerations, including “[t]he demand for commercial, retail and other facilities to service the growing on-airport, local and regional populations”. The Plan states that MAC will implement numerous objectives “[t]o achieve” this vision, including:
To provide services and facilities for the growing employee population at the airport,
To provide activities and services, including office, industrial, retail and commercial/business uses,
[To] [s]upport and enhance the south east regional economy and community,
….
To maximise the opportunity presented by the airport precincts’ excellent access to the surrounding road network and proximity to a strong (and growing) labour force to improve the supply of local employment opportunities.
As MAC observed in opening written submissions, “[c]onsistent with the tenor and obligations of the Lease, the 2010 Master Plan makes a direct link between commercial development and the ongoing viability of the airport”. Thus, the 2010 Master Plan notes that MAC will “develop surplus land not required for aviation as employment and investment based properties” and states:
Importantly, the airport cannot operate simply on revenues derived from aviation activities. Investment in and returns from non-aviation activities are essential to facilitate the significant cost of operating the airport. These diversified revenues are required to facilitate the significant and necessary investment in aviation development, operations and airport infrastructure, in order to ensure the ongoing viability and growth of the airport and aviation activities.
In relation to Airport land use and operations, the 2010 Master Plan affirms that it “sets out how … it will continue to act as a specialised activity centre that provides activities and services, including aviation, office, industrial, retail and commercial/business uses”. The expression “specialised activity centre” is also used elsewhere in the 2010 Master Plan to describe the Airport. As appears below, the Kingston PS and the Greater Dandenong PS used the term “activity centre” in connection with certain kinds of commercial and retail developments. Its use in the 2010 Master Plan signifies that the authors of the 2010 Master Plan were cognisant of the significance of the term in a relevant planning scheme: see also [30]-[31] below.
Significantly for the dMDP, the 2010 Master Plan expressly contemplates the development of the Airport land for retail purposes of the type proposed by the dMDP. The 2010 Master Plan notes as part of the strategic plan and purposes that retail development in this area “could include a proposal for a Coles Group development with uses such as supermarket, DDS and restricted retail premises”. The land proposed for development under the dMDP is land in Precinct D (see below); and the zone controls for Precinct D also recognize the possibility of development of this kind.

As indicated in the previous paragraph, the 2010 Master Plan divides the Airport into precincts by reference to the activities in each precinct. For each precinct, the Master Plan sets out development objectives, principles of development control, and relevant land uses, including for Precinct D in the north-east corner of the Airport. At the time that the Minister gave his approval to the 2010 Master Plan, Precinct D already included the Chifley Business Park and Precinct C contained Kingston Central Plaza and a Direct Factory Outlet. These developments were relevant to parts of the expert evidence, discussed hereafter.
The nominated uses in the 2010 Master Plan for Precinct D include “industrial, warehouse, office, retail, restricted retail, showrooms, business and corporate related facilities, and conference and hotel facilities”. The stated objectives for Precinct D include: “[t]o provide additional employment opportunities for the region linked to the Principal Public Transport Network; and “[t]o develop a strong employment activity node which may include office, warehouse, business, retail, restricted retail, showrooms, business, corporate, conference and hotel facilities”.
The 2010 Master Plan also set out Special Use Zone provisions to control land use and development at the Airport. Under the 2010 Master Plan, MAC is the approval authority for use and development proposals in respect of land at the Airport, subject to the requirement to prepare a major development plan for certain development proposals (as in this case).
Precinct D is zoned as Special Use Zone 2 (SUZ2), a purpose of which is “[t]o encourage the development of commercial, retail, business and offices uses”. Each zone lists land uses in three sections: (1) uses that do not require approval; (2) uses that require approval; and (3) prohibited uses. “Shop” (which includes a supermarket and a bottle shop) and “Industry” (which includes repairing or servicing vehicles) are “as-of-right” uses in SUZ2, subject to the requirement that a proposal for a “shop” over 1,000 square metres have economic and planning policy assessments. Whilst included in the definition of “Shop”, restricted retail premises is listed separately as a discretionary use in SUZ2 and has its own definition, including land used to sell goods such as office equipment and supplies.
Whilst noting that Victorian planning provisions do not apply to the land at the Airport, the 2010 Master Plan addresses the issue of its consistency with State planning policy, as the Act then required it to do. It relevantly states as follows:
Following the introduction of an Urban Growth Boundary … for Metropolitan Melbourne, the then Department of Sustainability and Environment advised the MAC that the land is not subject to Victorian planning controls and was therefore left out of the growth area boundary. …
State Planning Policy at Clause 12 relates to Metropolitan Development and implements the directions of the metropolitan strategy, Melbourne 2030. Clause 12.04 [“]A more prosperous city[”] includes the following strategy in relation to Moorabbin Airport:
Recognising Moorabbin Airport as an important regional and State aviation asset by supporting its continued uses as a general aviation airport, ensuring future development at the site encourages uses that support and enhance the State’s aviation industry and supporting opportunities to extend activities at the airport that improve access to regional Victoria.
…
This Master Plan establishes clear directions for the continuing operation of the Airport in a manner which ensures the safety and efficiency of airfield operations in accordance with the requirements of … Clause [18.04 of the State Planning Policy Framework].
The 2010 Master Plan also describes itself as consistent with clause 17.02 of the State Planning Policy Framework (SPPF), stating that “the Moorabbin Airport leasehold provides both an established and developing mix of activity centre, business and commercial employment activities in the inner southeast of Melbourne”.
The 2010 Master Plan refers to the specific statements about the Airport in Direction 4 of Melbourne 2030, the then current State Metropolitan Planning Strategy (Melbourne 2030). Direction 4 stated that:
Moorabbin Airport is an important regional and State aviation asset and its continued use as a general aviation airport is vital. The Government will work with the airport operators to ensure that future development of the site encourages uses that support and enhance the State’s aviation industry generally and take into account potential growth that could result from the closure of Essendon [airport]. Opportunities to extend the activities of the airport to improve access to regional Victoria are supported. The Moorabbin Airport Master Plan should reflect the principles of key Government strategies, including Melbourne 2030 … .
The 2010 Master Plan itself affirms that “[t]he protection and growth of the aviation role of the Moorabbin Airport as described in this Master Plan is consistent with these policies in Melbourne 2030 which seek to ensure the retention of this significant aviation asset”.
Elaborating on this theme, the 2010 Master Plan continues:
Melbourne 2030 encourages the concentration of activity in designated centres which vary in size and function and in the size of the catchment they serve. Activity centres are described as being the focus of the major change in metropolitan Melbourne over the next 30 years. They are well served by public transport and offer a range of services and facilities and will be developed for business, shopping, working and leisure. Within Kingston the main activity centres are designated as:
•Principal Activity Centre – Southland Shopping Centre
•Major Activity Centre – Cheltenham, Mentone, Moorabbin and Mordialloc
Given the nature of existing and potential land use and activity at the airport, and its value to the region in terms of employment and transport, the Airport effectively functions as an activity centre, consistent with similar specialised activity centres including Essendon and Melbourne Airports; or other major research, development and employment nodes.
The consolidation of activity at the airport is consistent with state policy directions which encourage the concentration of activity at established centres.
It is convenient to note at this point that Melbourne 2030 has since been replaced by the State Metropolitan Planning Strategy – Plan Melbourne (Plan Melbourne), relevant details of which are discussed below.
The 2010 Master Plan further emphasised that “the consolidation of activity at the airport is consistent with state policy directions regarding concentrated activity in established centres, and the importance of facilitating development which provides service and choice for the consumer”.
Significantly, Moorabbin Airport is able to accommodate a reasonable, and workable but justifiable portion of the identified growth in metropolitan retail floor space, an attribute not commonly found at other existing centres.
In this context, increased activity at the airport will reinforce the existing role played by retail and other land uses on site whilst also assisting in meeting the metropolitan need for significant additional retail floor space over the next 25 years.
MAC could not, however, proceed to develop Precinct D as proposed in the dMDP, unless it first prepared and obtained Ministerial approval for the development.
At the hearing, the parties accepted that the dMDP was consistent with the Lease and the 2010 Master Plan and gave effect to its purposes (subject to the contention of Greater Dandenong CC that the dMDP did not “relate to” an airport, which is discussed below). A comparison of the 2010 Master Plan and Lease with the dMDP shows that the parties’ position was correct in this regard.
Draft Major Development Plan – Wesfarmers Project
The Minister exercises further control over proposed major developments by approving, or refusing to approve, a draft major development plan. As will be seen, before it could lawfully proceed, the proposed Wesfarmers Project required the preparation of a draft major development plan and Ministerial approval.
For present purposes, the Wesfarmers Project commenced in October 2010, when MAC entered into agreements for sublease (together, the Agreements) with Coles Supermarkets Australia Pty Ltd, Kmart Australia Ltd, Liquorland (Australia) Pty Ltd and Officeworks Superstores Pty Ltd (together, Wesfarmers) over part of the Airport. Under the Agreements, MAC undertook to construct a number of retail buildings at the north-eastern end of the Airport (Precinct D of the 2010 Master Plan); and, once those buildings were constructed, MAC undertook to sublease the relevant land and buildings to Wesfarmers. Significantly for this case, the Agreements included a requirement that MAC obtain all necessary approvals under the Act within a specified timeframe.
The proposed development was described in the dMDP as the “Wesfarmers Group Project”. It was to be located on a 4.8 hectare site. In a foreword to the dMDP, MAC stated that it was “pleased to present this Draft Major Development Plan … for the Wesfarmers Group project” and that:
The Wesfarmers Group Project will contribute 270 direct on-site jobs in addition to the existing employment base of 3,300 on Airport jobs. The proposed development will enhance diversity, choice and access to goods and services for local and regional communities as well as students and employees on the Airport. The development will also improve public and private infrastructure and movement networks in the local area.
The dMDP continued:
Based on the detailed assessment and review undertaken, MAC respectfully requests that the Minister … approve the [dMDP] (April 2013) as submitted. Subject to approval of the Wesfarmers Group Project Draft Major Development Plan (2013) by the Minister … it will become the replacement Wesfarmers Group Project Major Development Plan (2013) …
An executive summary described the proposal in the following terms.
The proposed development comprises a Coles Supermarket, Kmart, Officeworks, Kmart Auto and 1^st Choice Liquor outlet measuring approximately 14,500 m².
The Wesfarmers Group Project comprises the following core elements:
-         retail uses
-         built form
-         vehicle and pedestrian access
-         building and service infrastructure, and
-         landscaping treatments.
This was reiterated within the body of the dMDP, which, amongst other things, stated:
The Wesfarmers Group Project comprises a large format retail development including shops (Coles, Kmart and 1st Choice Liquor), restricted retail premises (Officeworks) and industry (Kmart Auto). All businesses have signed commitments to the site that are binding once approval of the MDP is achieved.
The dMDP stated that the relevant land was bounded by Boundary Road and Centre Dandenong Road, two major arterial roads in Melbourne’s south-east. The dMDP stated, as was then intended, that “MAC will lease the completed development to the Wesfarmers Group and its associated businesses”.
The dMDP contained a detailed description of the proposed development, which was said to be “for the Wesfarmers Group” and included detailed references to the specialist reports and drawings prepared for the Wesfarmers Project. Having regard to that Project, the dMDP addressed various important issues, including consistency with the 2010 Master Plan and also with State and local planning provisions. Amongst other things, the dMDP provided an assessment of “potential economic, environmental and social effects and impacts of the proposed Wesfarmers Group Project” and an account of engagement with stakeholders in relation to that Project. The Tribunal emphasises that the dMDP specifically concerned the Wesfarmers Project, rather than some other retail development.
Draft Major Development Plan and the legislative regime
Major Development Plans are addressed in Div 4 of Pt 5 of the Act, which covers s 88 to s 96. The “Wesfarmers Group Project”, comprising the works to be done under the Agreements, constituted a “major airport development” within s 89(1) of the Act, either because the works fell within s 89(1)(e) or s 89(1)(na) or both. Under s 89(1)(e) and (na), a major airport development is, relevantly, “a development that is carried out at an airport and that consists of … constructing a new building, where … the building is not wholly or principally for use as a passenger terminal; and the cost of construction exceeds $20 million …; … or a development of a kind that is likely to have a significant impact on the local or regional community”.
In order to carry out a major airport development, MAC was required by s 90(1) of the Act to prepare a major development plan for the Minister’s approval under s 94 of the Act. The effect of s 90(1) is, relevantly, that an airport-lessee company must not carry out a major airport development (such as the Wesfarmers Project) unless “the carrying out of the development is in accordance with a major development plan approved under [Div 4 of Pt 5 of the Act]”. See also s 90(3).
A draft major development plan may be given to the Minister by an airport-lessee company seeking the Minister’s approval: s 94(1). In this event, the Minister must either approve, or refuse to approve, the plan: s 94(2).
Pursuant to s 92, certain consultations must be undertaken before a draft major development plan can be submitted to the Minister under s 94. The airport-lessee company must advise the relevant State Minister and authority with responsibility for town planning or use of land, and each local government body with responsibility for an area surrounding the airport, of its intention to seek approval: s 92(1A). The airport-lessee company must also invite public comment on the draft major development plan (s 92(1)); and any comments received from the public must accompany the draft major development plan (s 92(2)(a)), together with a written certificate by the airport-lessee company that, amongst other things, lists the names of those members of the public, summarises their comments and demonstrates that the airport-lessee company has had due regard to those comments in preparing the draft plan (s 92(2)(b)).
Before determining to approve, or refuse to approve, a draft major development plan, the Minister must have regard to the matters set out in s 94(3), although the Minister may also have regard to other matters (s 94(4)). Pursuant to s 94(3), the Minister must have regard to:
(aa)the extent to which the plan achieves the purpose of a major development plan (see subsection 91(1A));
(a)the extent to which carrying out the plan would meet the future needs of civil aviation users of the airport, and other users of the airport, for services and facilities relating to the airport;
(b)the effect that carrying out the plan would be likely to have on the future operating capacity of the airport;
(c)the impact that carrying out the plan would be likely to have on the environment;
(d)the consultations undertaken in preparing the plan (including the outcome of the consultations);
(e)the views of the Civil Aviation Safety Authority and Airservices Australia, in so far as they relate to safety aspects and operational aspects of the plan;
(f)if the plan relates to a sensitive development:
(i)whether the exceptional circumstances that the airport-lessee company claims will justify the development of the sensitive development at the airport; and
(ii)the likely effect of the sensitive development on the future use of the airport site for aviation related purposes; and
(iii)the likely effect of the sensitive development on the ground transport system at, and adjacent to, the airport.
The Minister may also have regard to other matters that are not listed in s 94(3). Section 94(4) expressly provides that s 94(3) “does not, by implication, limit the matters to which the Minister may have regard”. Section 94(5) stipulates that “the Minister must not approve the draft major development plan unless it is consistent with the final master plan”.
Section 94(7) further provides that the Minister may approve the draft major development plan subject to conditions. Sections 94(7A) and (7B) further state:
(7A)Unless an approval by the Minister states otherwise, the approval is subject to a condition that the development be substantially completed before the end of a specified period ending no later than 5 years after the approval.
(7B)The Minister may, before the end of that period, extend the period by up to 2 years. The Minister may extend the period only once. The Minister may extend the period subject to one or more conditions.
The Minister is obliged to give reasons for a decision to refuse to approve a draft major development plan (s 94(9)).
At this point, for reasons that appear below, I also note that the Act specifically provides for the Minister to approve, or refuse to approve, minor variations of a major development plan (s 95). The Minister may require a draft variation of a major development plan to be subject to public comment (ss 95(2)(c) and 95A).
The purpose of a major development plan bears on the nature of the other matters that the Minister may take into account in reaching a decision under s 94(2). The purpose of a major development plan is to set out the details of the proposed development. Thus ss 91(1A) and (1), which were central to the arguments of the joined parties, provide as follows:
(1A)The purpose of a major development plan in relation to an airport is to establish the details of a major airport development that:
(a)       relates to the airport; and
(b)is consistent with the airport lease for the airport and the final master plan for the airport.
(1)A major development plan, or a draft of such a plan, must set out:
(a)       the airport-lessee company’s objectives for the development; and
(b)the airport-lessee company’s assessment of the extent to which the future needs of civil aviation users of the airport, and other users of the airport, will be met by the development; and
(c)a detailed outline of the development; and
(ca)whether or not the development is consistent with the airport lease for the airport; and
(d)if a final master plan for the airport is in force—whether or not the development is consistent with the final master plan; and
(e)if the development could affect noise exposure levels at the airport—the effect that the development would be likely to have on those levels; and
(ea)if the development could affect flight paths at the airport—the effect that the development would be likely to have on those flight paths; and
(f)the airport-lessee company’s plans, developed following consultations with the airlines that use the airport, local government bodies in the vicinity of the airport and—if the airport is a joint user airport—the Defence Department, for managing aircraft noise intrusion in areas forecast to be subject to exposure above the significant ANEF levels; and
(g)an outline of the approvals that the airport-lessee company, or any other person, has sought, is seeking or proposes to seek under Division 5 or Part 12 in respect of elements of the development; and
(ga)the likely effect of the proposed developments that are set out in the major development plan, or the draft of the major development plan, on:
(i)        traffic flows at the airport and surrounding the airport; and
(ii)       employment levels at the airport; and
(iii)the local and regional economy and community, including an analysis of how the proposed developments fit within the local planning schemes for commercial and retail development in the adjacent area; and
(h)the airport-lessee company’s assessment of the environmental impacts that might reasonably be expected to be associated with the development; and
(j)the airport-lessee company’s plans for dealing with the environmental impacts mentioned in paragraph (h) (including plans for ameliorating or preventing environmental impacts); and
(k)if the plan relates to a sensitive development—the exceptional circumstances that the company claims will justify the development of the sensitive development at the airport; and
(l)such other matters (if any) as are specified in the regulations.
(Emphasis added)

In this case, the requirement in s 91(1)(ga)(iii) that a dMDP set out the likely effect of the proposed developments on the local and regional economy and community, including an analysis of how the proposed developments fit within local planning schemes, was relied on by Kingston CC and Greater Dandenong CC. So too was the requirement in s 91(4), which reads as follows:
In specifying a particular objective or proposal covered by paragraph (1)(a), (c) or (ga), a major development plan, or a draft of a major development plan, must address:
(a)the extent (if any) of consistency with planning schemes in force under a law of the State in which the airport is located; and
(b)if the major development plan is not consistent with those planning schemes—the justification for the inconsistencies.
Section 91(3) should also be noted. It provides:
The regulations may provide that, in specifying a particular objective, assessment, outline or other matter covered by subsection (1), a major development plan, or a draft of such a plan, must address such things as are specified in the regulations.
Regulation 5.04 provides that a dMDP must address the obligations of the airport-lessee company as sublessor under any sublease and the rights of the sublessee. It states:
For subsection 91(3) of the Act, a major development plan must address the obligations of the airport-lessee company as sublessor under any sublease of the airport site concerned, and the rights of the sublessee under any such sublease, including:
(a)any obligation that has passed to the relevant airport-lessee company under subsection 22(2) of the Act or subsection 26(2) of the [Airports (Transitional) Act 1996 (Cth) (Transitional Act)]; or
(b)any interest to which the relevant airport lease is subject under subsection 22(3) of the Act, or subsection 26(3) of the Transitional Act.
At the time of the Decision, the dMDP addressed MAC’s obligations as sublessor; but, as noted already, these obligations no longer exist. I return to this matter hereafter.
The Decision made by the Minister
On 15 May 2013, MAC submitted the dMDP to the then Minister for Infrastructure and Transport, the Hon. Anthony Albanese, for approval. (The title of the Minister with responsibility for the Act is now the Minister for Infrastructure and Regional Development (Administrative Arrangements Order, 23 December 2014, Pt 14, p 31)).
Before submitting the dMDP to the Minister, as required by s 92, MAC conveyed its intentions to the State Minister and other State authorities and undertook public consultation. MAC also released an exposure draft to relevant Commonwealth authorities and obtained various assessments of the Wesfarmers Project, including with respect to aviation impact, planning, economic impact, social impact, environmental impact and transport.
Before making the Decision, on 21 June 2013 a delegate of the Minister made a request for further material pursuant to s 93A of the Act; and, in particular, requested “a detailed analysis of how the proposed development meets the requirements of s 91(1) and s 91(4) of the Act, specifically to demonstrate the extent of consistency with current and proposed State planning schemes, and if not consistent, a justification of the inconsistencies”. MAC responded to that request for information on 11 July 2013.
As previously stated, on 5 August 2013, the Minister refused to approve the dMDP under s 94(2)(b) of the Act. The Minister’s reasons for the Decision were set out in a letter dated 5 August 2013 and in an undated statement of reasons. In his 5 August 2013 letter, the Minister stated that he was not satisfied that “the planning issues including the potential impact of the proposed development on other development and broader plans for the region have been adequately addressed”. Nor was the Minister satisfied that “the information in the dMDP sufficiently demonstrates [that] the company has had due regard to those comments made during the consultation period as required under s 92(2)[(b)](iii) of the Act”. The Minister informed MAC that:
You may consider resubmitting a draft MDP for this development. However, given the contested nature of the planning issues, my expectation is that any resubmitted MDP would address and include the matters specified in [s 91(1)(ga)(iii)] of the Act, and the issue of the consistency of the development with the objectives of the Act more thoroughly.
I expect that this aspect of any resubmitted MDP would be supported by an analysis from an independent expert panel which would provide a full assessment of the consistency of the development with the objectives of the Act, the state's planning scheme and policies and local planning by relevant councils.
In the undated statement of reasons, the Minister set out his findings on material questions of fact and referred to the evidence on which he based those findings. His findings included that: (1) the development in the dDMP was a major airport development for the purpose of s 89(1)(e) as it consisted of constructing a new building where it is not wholly or principally for use as a passenger terminal with a construction cost exceeding $20 million; (2) the dMDP met the requirements of ss 91(1A) and 91(1); (3) for the purposes of s 91(4), the dMDP addressed the extent of consistency with local planning schemes and included a justification for identified inconsistencies; (4) the dMDP satisfied the requirements of s 93 by including a statement listing the stakeholders consulted and summarising their views; and (5) the dMDP was accompanied by a written certificate signed by MAC as required by s 92(2)(b) that sought to demonstrate that MAC had due regard to the comments received during public consultation. The Minister was not, however, satisfied that due regard had in fact been given to the comments from Kingston CC.
Further, the statement of reasons recorded that the Minister was satisfied, for the purpose of exercising the discretion under s 94, that:
·The draft MDP adequately established the details of the development in accordance with s 91(1A) (s 94(3)(aa));
·The development would not have a detrimental effect on the future operating capacity of Moorabbin Airport (s 94(3)(b));
·In line with advice received from the delegate of the Minister for Environment, the development would be unlikely to have a significant impact on the environment (s 94(3)(c));
·In line with advice from Airservices Australia and the Civil Aviation Safety Authority (CASA), the draft MDP presents no adverse impacts, issues or concerns from an operational or safety perspective (s 94(3)(e)); and
·The proposed development is consistent with the current Master Plan (s 94(5)).
Nonetheless, the Minister’s statement of reasons recorded that:
The expert reports provided by MAC and Kingston City Council demonstrated conflicting conclusions on issues relating to the extent of consistency of the proposed development with local planning schemes and its predicted impact on the local community and economy. The Minister concluded these matters had not been satisfactorily resolved in the MDP processes and that, on the material before him, there remained a substantial question over the impacts of the proposed development. In the absence of independent expert advice on these issues, the Minister was not satisfied the MDP should be approved.
…
While MAC provided its views of the response to the issues raised by Kingston City Council, no evidence was provided that these issues had been worked through in detail with council representatives in an attempt to resolve a shared position.
The Minister considered MAC did not adequately address the conclusions reached in Kingston City Council's submission and did not sufficiently demonstrate due regard to the comments made during the consultation period as required under [s 92(2)(b)(iii)] of the Act.
The Tribunal’s task
In reviewing the Decision to refuse to approve the dMDP, the Tribunal may exercise all of the relevant powers and discretions conferred by the Act on the Minister: see AAT Act, s 43(1). The task of the Tribunal is to make the correct or preferable decision on the material before the Tribunal: Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589 (Bowen CJ and Deane J). In doing so, subject to any statutory provision to the contrary, the Tribunal is not confined to the information before the primary decision-maker, and should generally take into account all relevant information up to the date of the decision on review: Shi v Migration Agents Registration Authority (2008) 235 CLR 286, 299 [37]-[38] (Kirby J), 315 [99] (Hayne and Heydon JJ), 328 [143] (Kiefel J) (with whom Crennan J agreed on this point at 319 [117]).
Pursuant to s 43(1) of the AAT Act, the Tribunal must make a decision:
(a)       affirming the decision under review;
(b)       varying the decision under review; or
(c)       setting aside the decision under review and:
(i)        making a decision in substitution for the decision so set aside; or
(ii)remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.
Termination of Agreements between MAC and Wesfarmers
The evidence before the Tribunal showed that two events occurred after the Decision of the Minister that were relevant to the Tribunal’s task. The first was that following this decision, the Agreements between MAC and Wesfarmers were terminated because MAC was unable to obtain the necessary approvals for the Wesfarmers Project. Whilst MAC has made inquiries and has generated some interest, there is currently no agreement between MAC and any proposed sublessee in relation to the dMDP.
The Tribunal was advised of the termination of the Agreements and the Wesfarmers Project early on the first day of the hearing. At that stage, none of the parties’ expert witnesses had addressed this circumstance. Nor had it been mentioned previously in the parties’ submissions. On the second day of the hearing, in making submissions on remittal under s 42D of the AAT Act (at the Tribunal’s direction), the Minister’s legal representative stated that the absence of the Agreements was “relevant potentially in the sense that … the expert evidence has been commissioned and provided on the basis of the particular type of retail development”. The Minister and the other parties nonetheless argued against remittal and, for the reasons stated that day, the Tribunal proceeded with the hearing and determination of the matter.
As appears below, some expert witnesses addressed this changed circumstance at the hearing.
Approval of Costco Development
The second event that was relevant to the Tribunal’s task was the Minister’s approval of the Costco MDP referred to earlier in these reasons. MAC had presented the proposal for the Costco Project to Kingston CC in December 2013. In February 2014, MAC gave notice that it was undertaking public consultations. Both Kingston CC and Dandenong CC subsequently participated in those consultations. In June 2014, almost a year after the Agreements between MAC and Wesfarmers had terminated, MAC submitted the Costco MDP to the Minister for approval. The Minister approved the Costco MPD on 7 August 2014.
In opening submissions, the Minister described the Costco Project in the following terms:
The Costco project is a $35 million development that will be situated in the Chifley Business Park on the Moorabbin airport site, adjacent to existing light industrial, warehousing and logistics type businesses and comprises:
a.A Costco warehouse (retail premises) with a building area of 13,642 square metres and an additional 122 square metres for service rooms including a café, optometrist, photos processing, hearing aid servicing and sales, and a tyre sales and fitting outlet.
b.A Costco service station with a site area of 5,245 square metres;
c.727 car parking spaces including 16 disabled spaces and 32 bicycle spaces; and
d.A loading dock area of 395 square metres.
Costco is a membership based, large format retailer, offering a diverse range of merchandise from groceries to white goods, primarily for bulk purchase.
This description was not disputed at the hearing and accords with the evidence given by the expert witnesses who subsequently addressed the Costco Project.
As already indicated, with the other parties’ agreement, the Minster’s legal representative informed the Tribunal of the existence of the Costco MDP on the morning of the first day of the hearing. Up until that time, none of the parties’ expert witnesses had addressed the Costco Project, although, in submissions on remittal made on the second hearing day, the Minister’s legal representative stated that the approval of the Costco MDP was “relevant to potentially planning and economic analysis evidence”. The Minister’s representative did not elaborate further.
Also in submissions on remittal, senior counsel for MAC submitted that there would be no “inhibition or difficulty in the tribunal dealing with the factual matters that might arise in relation to [the Costco Project] within the confines of the hearing”. The joined parties agreed that they would have a sufficient opportunity for their expert witnesses to address the effect of the Costco Project at the hearing.
As appears below, some expert witnesses addressed the effect of the Costco Project at the hearing.
The evidence of Paul Ferguson
The termination of the Agreements and the approval of the Costco MDP were the subjects of an affidavit by Paul Ferguson, MAC’s Chief Executive Officer, on 19 August 2014. Mr Ferguson also gave evidence at the hearing and was cross-examined.
Mr Ferguson’s affidavit was initially submitted in response to the Tribunal’s request that the parties address the possibility of remitting the matter for the Minister’s reconsideration. MAC ultimately sought to rely on all of it in the proceeding on the merits of its application. Kingston CC objected to admitting into evidence paragraphs 12(b) to (e) on the basis of relevance; and the affidavit was provisionally admitted, subjected to objection.
Mr Ferguson deposed that, prior to the Minister’s decision, Wesfarmers had agreed with MAC to extend the date by which MAC was to obtain the necessary approvals on two occasions. On 30 August 2013, however, Wesfarmers wrote to MAC, indicating that Wesfarmers would not extend the time any further and that Wesfarmers was treating the Agreements as terminated. A Departmental representative was informed in early September 2013 and Kingston CC, shortly thereafter. Mr Ferguson further deposed that the Costco MDP was submitted to the Minister for approval in June 2014 and approved on 7 August 2014, with the support of Kingston CC.
Mr Ferguson also deposed that the dMDP was important for MAC even without the agreement of Wesfarmers. In particular, at paragraph 12, he deposed:
(a)If the dMDP is approved, MAC could approach Wesfarmers to re-negotiate a lease agreement. MAC could also approach the market more generally to secure an alternative tenant. In my view, a prospective tenant would not be willing to enter into a lease agreement (at least at market rates) in circumstances where the dMDP has been previously refused.
(b)The dMDP is an important part of the integrated planning which underpins MAC’s approach to the master planning process … and its business generally. It is difficult for MAC to plan for infrastructure and other complimentary developments without certainty about whether development of the type foreshadowed in the dMDP could proceed.
(c)The dMDP represents a significant non-aviation commercial development which is essential to the continued operation of Moorabbin Airport. Aviation charges are not sufficient to cover the infrastructure and other costs associated with the running of MAC’s business. The nature of general aviation is that many operators are not investment grade businesses meaning that MAC cannot rely on income from them into the future. Non-aviation development provides a diversified income base which is more resilient to changes in the aviation industry and the economy more broadly. This means that MAC can continue to invest in aviation-related infrastructure into future.
(d)MAC has committed to infrastructure spending based on a development of a kind foreshadowed in the 2010 Master Plan being permitted. For example, MAC has committed $8.2 million for sewer and storm water works … .
(e)A decision in relation to the dMDP affects MAC’s land values which also affects rent reviews in relation to existing tenants. For example, in a recent rent review negotiation with one of the airport’s tenants, the fact of the Minister’s refusal of the dMDP was cited as justification for a lesser rent being payable.
(f)If the dMDP were to be approved, I understand that MAC would have a statutory obligation to substantially complete the development within five years. … .
In evidence at the hearing, Mr Ferguson stated that Wesfarmers had no option to take the site and that, whilst MAC was in ongoing discussion with Wesfarmers, he could not give an opinion as to whether Wesfarmers would be interested in renegotiating an agreement if the dMDP was approved. Mr Ferguson also stated that MAC had made inquiries in the marketplace to see if there were any other potential tenants and had generated some interest, but much would depend on the size of the supermarket on the site. In cross-examination Mr Ferguson stated that approximately 10% of the Airport’s revenue is derived from aeronautical operations and the balance, through lease revenues.
For reason that appear hereafter, I would reject Kingston CC’s objection to the admissibility of parts of Mr Ferguson’s affidavit, which are relevant to Greater Dandenong CC’s argument concerning the application of the words “relates to the airport” in s 91(1A) of the Act.
THE PARTIES’ SUBMISSIONS
MAC’s submissions
MAC contended that the correct or preferable decision was that the Tribunal approve the dMDP under s 94(2) of the Act. MAC submitted that the two principal issues in contest between the parties at the hearing (whether the dMDP “relates to the airport” for the purpose of s 91(1A) and the extent of its consistency with local planning schemes) should be resolved in its favour. MAC further submitted that, even if the Tribunal found that there was inconsistency between the dMDP and the Kingston PS, which lacked justification, nonetheless the Tribunal should approve the dMDP, bearing in mind the objects of the Act as stated in ss 3(b) and (c), and because the dMDP satisfied the mandatory considerations in s 94(3) of the Act.
MAC submitted that, under the applicable legislative regime, the three critical regulatory features were “the airport lease, the Master Plan and the Major Development Plan”. MAC emphasised that, “[c]onsistent with the tenor and obligations of the Lease, the 2010 Master Plan [made] the direct link between commercial development and the ongoing viability of the airport”; and that the Master Plan, which MAC referred to as a “controlling strategic document”, specifically contemplated the type of development proposed in the dMDP.
MAC argued that s 94(3) of the Act should be construed so as to give precedence to the mandatory considerations to which it referred over the non-mandatory consideration of consistency with local planning schemes. MAC accepted that it was open to the Minister to take into account the matters identified in ss 91(1)(ga) and 91(4) in exercising power under s 94(2) of the Act, but argued that the matters in ss 91(1)(ga) and 91(4) “must be seen as subordinate to the mandatory considerations in s 94[(3)]”.
Further, referring to s 112 of the Act, MAC contended that:
State laws, in particular relating to land use planning, are specifically excluded, and provide only a non-mandatory point of reference in respect of one aspect of [a major development plan].
This meant, so MAC submitted, that ss 91(1)(ga)(iii) and 91(4) ought not to be construed as requiring a major development plan (MDP) to be consistent with a local planning scheme. Rather, so MAC argued, “[t]he question of consistency [in s 91(4)] ought not be answered in terms of whether an [sic] MDP is capable of approval under a local planning scheme, but by reference to whether it is not antipathetic to it, not contradictory to it, accordant with it, or compatible with it”. MAC submitted that “‘[j]ustification’ in s 91(4) should be construed as a justification in local planning terms of any identified inconsistency, rather than as an ultimate justification of the MDP” and that “[t]he terms of a final master plan – and in particular the land use and development controls and policy applicable to the subject land – may justify an identified inconsistency for the purposes of s 91(4)”.

In response to Kingston CC’s argument on ss 91(1)(ga)(iii) and 91(4), which led it to invoke the concept of ‘net community benefit’ discernible in the administration of the Kingston PS, MAC argued:
The MDP is not required to result in a net community benefit under the Act. Further, a net community benefit test is not applicable if, in accordance with the 2010 Master Plan, Moorabbin Airport is recognised as an existing activity centre. There is also a question as to whether the net community benefit test arises in respect of proposed additional retail floorspace at a State-significant Transport Gateway under Plan Melbourne.
Nevertheless, the evidence establishes that the MDP will result in a net community benefit, having regard to the additional jobs to be created in the local and regional economy, and the convenience and competition provided to employees and residents within the trade area.
Accordingly, so MAC submitted, the dMDP was consistent with the Kingston PS (and, if necessary, the Greater Dandenong PS). MAC’s alternative submission was that any inconsistency was justified by the terms of the 2010 Master Plan and the net community benefit to be obtained.
As regards Greater Dandenong CC, MAC further submitted that that the Act did not require any consideration of the consistency of the Greater Dandenong PS with the dMDP as it was not a “local planning scheme for commercial and retail development in the adjacent area” within s 91(1)(ga) or a “planning scheme[] in force under a law of the State in which the airport is located” within s 91(4).
In response to Greater Dandenong CC’s argument concerning the words “relates to the airport” in s 91(1A), MAC submitted that, on their proper construction, these words encompassed the uses proposed in the dMDP.
Although the Agreements that formed the basis of the Wesfarmers Project were at an end, MAC submitted that the correct or preferable decision was to approve the dMDP because:
Should the proposed MDP be approved by the Tribunal, [MAC] will seek to renegotiate its former agreement with Wesfarmers, or alternatively let the subject land to alternative tenants. It is required to act on an approved MDP within 5 years of its approval: s 94(7A) of the Act.
The proponent of the MDP is the Applicant. The proposal under the Act and the 2010 Master Plan is for the use and development of the subject land, not for individual tenancies. Should tenan[ts] other than those proposed in the MDP enter into subleases for the subject land, the MDP is amenable to minor variation under s 95 of the Act if necessary.
There is evidence to suggest that the Wesfarmers’ proposal represents the “worst case scenario” in terms of potential impact on competing activity centres … Accordingly, the Tribunal can be satisfied that any alternative proposal will not be likely to have any more significant impact on those centres.
MAC filed submissions in reply to Kingston CC and Greater Dandenong CC. In relation to Kingston CC’s submissions, MAC responded particularly to its contention that the dMDP should not be approved absent any certainty concerning the operator and the nature and scope of the proposed land uses. Thus, MAC submitted that: (1) there was no additional requirement that the outcome of economic or planning policy assessments for shops of 1,000 square metres or more provide justification for that land use; (2) there was no necessity for a sub-lessee or sub-lease for a dMDP to be approved; (3) amendments to the MDP would require approval as a minor variation under s 95, or approval of a new MDP under s 94; and (4) the status of the dMDP was not in issue. MAC also challenged the characterisation of the effect of the evidence of the planning experts with regard to departure from the activity centres hierarchy and the status of Plan Melbourne. In relation to Greater Dandenong CC’s submissions, MAC commented that its “criticism of the expert evidence of [Messrs Ganly, Barlow, Fuller and Burman] was significantly lessened by its failure to call any evidence to support its own case”.
The Minister’s submissions
At the hearing and in closing submissions, the Minister submitted that, on the current information (including the expert report that the Department obtained subsequent to the Decision under review from URS Australia Pty Ltd (URS Report) as discussed below), the preferable decision would be to set aside the Decision and to approve the dMDP.
The Minister contended that the dMDP achieved the purpose of a major development plan, being consistent with the Lease and the 2010 Master Plan. In response to Greater Dandenong CC’s argument, the Minister submitted that the dMDP “relates to the airport” (within s 91(1A)(a)), amongst other reasons, because the Act did not “indicate an intention to limit the activities of an airport-lessee company so as to prevent it from carrying on commercial activities at the airport site” and “the revenue streams captured through this development are expected to support ongoing investment in airside infrastructure”.
Whilst submitting that none of the mandated matters in s 94(3) of the Act provided a reason to refuse to approve the dMDP, the Minister focussed his submissions on the significance of ss 91(1)(ga)(iii) and 91(4). The Minister accepted that, in the circumstances of this case, certain matters referred to in these provisions were relevant to the Tribunal’s decision on review. These matters were: (a) the likely effect of the proposed development on the local and regional economy; (b) how the proposed development fits within the local planning scheme for commercial and retail development; and (c) the extent (if any) of consistency with the Kingston PS and the justification for any inconsistencies.
The Minister contended that the Tribunal should find that the development proposed by the dMDP would have a positive impact on the local and regional economy, primarily because the development would create increased employment opportunities in that economy. Further, the Minister cited the following factors: a likely increase in net employment in both the construction and operational stages of the development; an increased level of competition and choice for resident and worker populations; an insignificant increase in travel to access the development compared with existing travel; and that the immediate closure of any particular centre or facility was unlikely.
The Minister submitted that the relevant local planning scheme for the purpose of s 91(1)(ga)(iii) was the Kingston PS, although, having regard to s 91(4), it was also necessary to have regard to that scheme “in the context of the entirety of the Victorian planning scheme”, including Plan Melbourne.
The Minister accepted that the dMDP was inconsistent with the Kingston PS in three main areas, namely: with respect to “settlement objectives”; “built environment and heritage”; and “transport”. The Minister argued, however, that these inconsistencies were justified, citing various considerations, including the status of the 2010 Master Plan as the primary planning document, the fact that the Kingston PS does not allocate a zoning to the Airport; the provision for “out-of-centre” development in cl 17.01-2 of the SPPF; the hierarchy of State planning instruments requiring attention to Plan Melbourne; and Plan Melbourne’s identification of the Airport as a “State Significant Element – Transport Gateway” and its focus on “local investment, job creation, stimulation of a greater mix of development and the creation of ‘20 minute neighbourhoods’”. The Minister submitted furthermore that, having regard to the employment benefits, the Tribunal should be satisfied that the dMDP will have a positive “net community benefit”.
The Minister submitted that the positive impact on employment should weigh in favour of approval and, in all the circumstances, the inconsistencies between the dMDP and the Kingston PS should not weigh against approval in light of the justification for those inconsistencies.
The Minister further submitted that the approval of the Costco Project and the absence of a tenancy agreement were matters that might affect the weight to be given to the information provided in support of the dMDP and to the expert evidence before the Tribunal, but did not tell against approval. So far as the Costco Project was concerned, the Minister submitted that “the weight of the expert evidence on the impact of the Costco development is that that impact is marginal and does not significantly affect the impact of the dMDP”. So far as the termination of the Agreements with Wesfarmers was concerned, the Minister submitted that “it can be understood from the evidence of Mr Ferguson that if approval is given [MAC] intends to proceed with the proposed development”; and that “the approval would permit [MAC] to undertake construction of buildings as proposed, and would permit the use of those buildings for the purposes identified in the dMDP”. The Minister contended that any tenancy agreements for the occupation and use of the buildings were for MAC and “may change over time”. The Minister stated that:
If, after approval, there were to be a variation to the approved major development plan, it would either be necessary for [MAC] to seek approval under s 95 of the Act (if the variation is minor in nature), or submit a new draft major development plan for approval under s 94 (if the variation is more comprehensive).
The Minister contended that the Tribunal “should proceed to consider the dMDP on the basis that the proposed development will be in accordance with the description set out in the dMDP, on the understanding that [MAC] intends to undertake a development of that “type” but subject to the possibility that the buildings will be occupied by tenants other than Wesfarmers operating businesses of a similar nature”. The Minister submitted that, having regard to the expert evidence of David Fuller (see below), “the Tribunal should proceed on the basis that any change to the tenancy arrangements will not substantially affect the efficacy of the analyses undertaken concerning planning and economic issues”.
Kingston CC’s submissions
Kingston CC submitted that the decision to refuse to approve the dMDP was the correct or preferable decision and, accordingly, the Decision under review should be affirmed. In making a decision under s 94(2) of the Act, the Council submitted that the decision-maker was not limited to the criteria in s 94(3) but should also have regard to the matters identified in ss 91(1)(ga) and 91(4). The Council argued that, in the context of the Act, “the central issues [were] those involving land use planning and … require an assessment of the consequences of the approval of the dMDP against the criteria required to be addressed under that statutory scheme”.
Kingston CC argued that the dMDP proposed a development that was inconsistent with the [Kingston PS] “in a broad sense”, because approval would “sanction the introduction of a significant shopping centre on a location entirely inconsistent with”: (1) the hierarchy of “activity centres” contemplated under the Kingston PS (including in the context of Plan Melbourne); and (2) the policy and controls under the Kingston PS applying to the location of activity centres and commercial and retail development on land adjacent to the airport.
In relation to activity centres, Kingston CC relied particularly on cls 17.01-1 and 17.01-2 of the Kingston PS, submitting that, notwithstanding Plan Melbourne, the hierarchy of activity centres remained “firmly in place”. The Council added that, while cl 9.01 of the Kingston PS directed attention to Plan Melbourne, any amendment to State planning policy to give effect to Plan Melbourne remained “a work-in-progress”.
Noting that the joint statement by the experts at the meeting on 15 August 2014 included the statement that “[t]he local planning schemes provide opportunities to depart from the hierarchy provided that development proposals would result in net community benefit”, the Council further submitted that:
The criteria required to be addressed under the scheme of the Act, in particular, since the amendments made by the Airports Amendment Act 2010 … including, in particular, the insertion of ss 91(1)(ga) and 91(4), require an approach analogous to an assessment of net community benefit in relation to a dMDP.
Kingston CC described the criteria in these provisions as “critical to the assessment of a dMDP” and submitted that “the scheme of Part 5 of the Act … reveal[ed] that … the development of master plans and MDPs ought not be undertaken with a view that airport land is somehow an island within a vacuum, unaffected by its surroundings and, in turn, of no consequence upon those surrounding lands.” Kingston CC submitted that “any material inconsistencies” between the dMDP and the Kingston PS, which are not justified on the evidence, ought to weigh against approval of the dMDP.
Kingston CC argued that the termination of the Agreements with Wesfarmers meant that there could be no “meaningful assessment of the economic impact of approval of” the dMDP, because the Tribunal lacked sufficient “knowledge of the nature and scope of the intended activities to be conducted following the construction of the proposed development”. Kingston CC submitted that, following the “withdrawal of Wesfarmers and the uncertain status of any new operator, the status of the dMDP” was a “significant issue”.
Referring to the evidence of Mr Gavin Duane (discussed below), Kingston CC made the point that “[a]pproval of the dMDP without any certainty concerning the operator and the nature and scope of the proposed land uses would be tantamount to providing development approval for large box buildings and handing over control of the subsequent land uses to MAC”. The Council supported this submission in a number of ways.
For example, in closing submissions, Kingston CC argued that “the approval of a dMDP which allows the construction of a building and works capable of (or intended to) accommodate use of that land for the purpose of a shop exceeding 1,000 [square] metres would, implicitly also grant permission for that use”, notwithstanding that MAC’s permission was expressly required under the 2010 Master Plan for the use of land within Precinct D for the purpose of a shop which exceeds 1,000 square metres.
Further, Kingston CC argued that, having regard to s 32 of the Act and reg 5.04 of the Regulations, “there must be a sub-lessee who is permitted by MAC (with the consent of the Commonwealth) to carry on the substantial trading activities which would comprise the use of the airport land in the event the dMDP were approved”. The Council submitted that the dMDP failed to comply with reg 5.04 since it did not set out MAC’s obligations as sub-lessor and the rights of the sub-lessee under “the arrangements then in place” and, moreover, in the absence of an agreement with Wesfarmers or any other operator, the requirements of reg 5.04 could not be satisfied.
Kingston CC also argued that MAC bore the onus of presenting evidence to persuade the Tribunal that the dMDP should be approved and, in particular, that the proposed development would result in a net community benefit. The Council submitted that none of the relevant experts had carried out a net community benefit analysis in such a way as to assist the Tribunal. It further submitted that “the report by URS of 18 December 2013 … [did] not amount to evidence of information which … put to rest the matters which had troubled the former Minister”.
In summary, Kingston CC contended that the totality of evidence before the Tribunal showed that:
·     there is no demand for the proposed retail floor space/developments (and use) on the airport land;
·     while a comprehensive net community benefit analysis has not been carried out it is, at least, clear that negative impacts would accrue which would, at a minimum, adversely affect the Dingley Village Shopping Centre and, via those impacts, affect the local and regional economy and community;
·     MAC has not advanced any evidence which would justify the departure from the clear and long-standing support in state planning policy in local planning schemes, including the [Kingston PS and the Greater Dandenong PS], for the activity centre hierarchy; let alone produced evidence that there would be a net community benefit in locating the proposed developments in this out-of-centre location;
·     with the advent of Costco, the cumulative negative impact upon the activity centres in the catchment area (and, in particular, Dingley Village) cannot be justified; and
·     the opportunity cost involved in the loss of, what Dr Spiller described as land “…strategically important for employment, industrial development [and] business development in the region …” would be a substantive disbenefit which might not be capable of remedy and ought not be supported.
In reply submissions, Kingston CC contended that, apart from the Minister, there was no evidence that the persons identified in MAC’s submissions as supporting the dMDP continued to be supportive of it, in the absence of Wesfarmers and any information about other tenants and following the approval of the Costco MDP. Kingston CC also contended in reply that “[t]he statutory scheme … does not include any provision which sanctions the use of the Master Plan as, in effect, the ‘last word’” or, as its legal representative said at the hearing, that would allow the Master Plan to be treated as the “sole source of guidance or permission”.
Greater Dandenong CC’s submissions
Greater Dandenong CC also submitted that the decision to refuse to approve the dMDP was the correct or preferable decision and, accordingly, the Decision under review should be affirmed. When making this submission, Greater Dandenong drew attention to the following circumstances:
7.1.1 Wesfarmers … has no agreement with the airport lessee;
7.1.2the lessee has indicated that a review of the Master Plan will commence within approximately 6 months;
7.1.3the effect of Costco has not been addressed in the Master Plan or the draft MDP;
7.1.4there will be an inevitable delay in finding a new [operator] for the development, which could take more than 6 months.
Greater Dandenong CC submitted that it could not be said that the dMDP “relates to the airport” within the meaning of s 91(1A) of the Act. The Council argued that there was “a distinction between ‘ancillary’ or incidental activities at airports and use and development which have a functional association or co-dependence on the airport” on the one hand; and on the other hand, “a stand-alone retail/commercial development that has no functional association with the airport”. The Council submitted that what is proposed in the dMDP was a stand-alone retail development unrelated to the Airport.
Consistency with the Master Plan should not, so the Council said, be confused with the question of whether the dMDP relates to the Airport. Greater Dandenong CC contended that, in the context of the Act, the words “relates to” in s 91(1A)(a) require “more than a mere physical, geographical or spatial relationship” and it is not enough that “commercial development will assist in subsidising the financial position of the airport”. Greater Dandenong CC maintained that “the legislative scheme has been altered in a material way” since Direct Factory Outlet and that “the findings of the Court in [that] case are not of any real assistance” in the circumstances of the proposal in the dMDP. On the contrary, referring to the decision of Deputy President Gibson in Jinalec Park Pty Ltd v Mornington Peninsula SC [2007] VCAT 1238, Greater Dandenong CC submitted that “some form of physical or functional connection” was required as opposed to “an abstract, financial or theoretical relationship”. The Council added that the provisions “call for an analysis of consistency with state and local planning policy”.

MAC contended that the proposal under the Act and the 2010 Master Plan “is for the use and development of the subject land, not for individual tenancies”. MAC added:
Should tenancies other than those proposed in the MDP enter into subleases for the subject land, the MDP is amenable to minor variations under s 95 of the Act if necessary.
The Minister contended:
If after approval, there were to be a variation to the approved major development plan, it would either be necessary for the Applicant to seek approval under s 95 of the Act (if the variation is minor in nature), or submit a new draft major development plan for approval under s 94 (if the variation is more comprehensive).
Both MAC and the Minister approached the need for approval in s 94(2) and the possibility of variation the wrong way round. As stated already, any approval of a dMDP under s 94(2) is for the airport-lessee company to implement the approved major development plan in accordance with the details set out in, and established by, that plan. If the details related to a proposal that no longer exists, then it would defeat the purpose of a major development plan and of s 94(2) of the Act to grant approval.
Both MAC’s and the Minister’s submissions are predicated on the assumption that a draft major development plan may be approved where the reader can infer from the draft the nature of the proposed development at a very general level: here, it might be simply a retail development. This assumption is mistaken. The statutory purposes can only be fulfilled if, amongst other things, the draft major development plan contains a detailed outline of the development in conformity with s 91(1)(c) and can therefore establish “the details of the … development” in accordance with its statutory purpose, as stated in s 91(1A).
Regulation 5.04 of the Regulations is consistent with this approach in so far as it provides that, “[f]or subsection 91(3) of the Act, a major development plan must address the obligations of the airport-lessee company as sublessor under any sublease of the airport site concerned, and the rights of the sublessee under any such sublease”. That is, reg 5.04 provides for a certain kind of information to be made available with a relatively high level of specificity. This is of some moment here because the proposed development in this case was based on agreements contemplating a particular sublessor and sublessee, with concomitant rights and obligations. Furthermore, the present was not simply a case in which the proposal in a draft major development plan remained effectively on foot, although the precise identity of a tenant altered in a non-material way, as MAC’s submission apparently assumed. Rather, this was a case in which the proposal, as detailed in the dMDP, ceased to exist. There were no proposed tenants or sub-lessees, let alone any with a similar retail business composition to that proposed in the Wesfarmers Project.
As already indicated, the most that Mr Ferguson’s evidence established was that MAC would continue to negotiate with Wesfarmers or another market participant in order to proceed with a retail development, but the precise characteristics of such a retail development and its occupants were unknown. I would not therefore infer that MAC intended to proceed with the proposed development detailed in the dMDP. I do not consider that it is open to the Tribunal, as the Minister contended, to approve the dMDP “on the understanding that the Applicant intends to undertake a development of that ‘type’ but subject to the possibility that the buildings will be occupied by tenants other than Wesfarmers operating businesses of a similar nature”. The supposed understanding is too vague and imprecise; if approval were given in such circumstances, the statutory purpose of a major development plan, as outlined in s 91(1A), the purpose of the s 91(1)(c) requirement for a detailed outlined of the development, and of the approval requirement in 94(2), would be set at naught. As Kingston CC submitted, the statutory scheme did not sanction “the leap of faith required in that exercise”.
For this reason alone, the Tribunal would not set aside the Decision under review and would not approve the dMDP.
At this point, it is convenient to mention a related, though conceptually distinct, reason not to approve the dMDP. Most of the evidence before the Tribunal on the likely economic impacts of the development proposed by the dMDP was predicated on the particular retail tenancy mix making up the Wesfarmers Project and specified in the dMDP. As Mr Ferguson’s evidence showed, however, there was at this stage in the history of the dMDP no reason to suppose that this retail mix would in fact be replicated if the dMDP were approved. The Tribunal could not therefore be satisfied as to the likely effect of the proposed development on the local and regional economy. Further, the Tribunal could not be satisfied whether the economic advantages of the proposal so outweighed the economic disadvantages that the economic advantages might be included in the justification for any inconsistency between the dMDP and the local planning schemes. As already noted, these were key issues for the parties before the Tribunal.
Both MAC and the Minister sought to overcome this difficulty by reference to Mr Fuller’s evidence that the Wesfarmers Project (with its particular retail mix) represented the “worst case” scenario in terms of potential impact on other designated activity centres, such as Dingley Village because it included a supermarket that was likely to compete with existing local supermarkets (particularly, the Safeway supermarket at Dingley Village). I do not accept Mr Fuller’s evidence on this point. Rather, I am persuaded by the contrary evidence of Mr Ganly and Mr Duane, both of whom impressed me as more reliable witnesses in this particular case than Mr Fuller and having a more thorough understanding of the dMPD proposal and the locality in which it was to be situated. Their evidence, which I accept, was that the Wesfarmers Project was not the worst case scenario that might be reasonably conceived.
As noted above, Mr Ganly’s evidence was that the proposed development would have a material economic downside if Woolworths (rather than Coles) was to operate the new supermarket in the proposed development with the result that the Safeway (effectively Woolworths under a different name) supermarket at Dingley Village was no longer viable. The Tribunal accepts Mr Ganly’s evidence in this regard.
Mr Duane also took issue with Mr Fuller’s “worst case” scenario evidence. His evidence was that there may be higher economic impacts on centres such as Dingley Village than the Wesfarmers Project would occasion, depending on the mix of tenancies. Specifically, Mr Duane’s evidence was that a certain mix of specialty shops may in fact have a higher impact. Further, it may be recalled that Mr Duane’s evidence was that impacts would vary substantially depending on the ultimate uses and that it was difficult to speculate about these effects without more information. The Tribunal accepts Mr Duane’s evidence in this regard.
It may be that, as MAC argued, the likely effect of the proposed development on the local and regional economy and community and the justification for any inconsistency between the dMDP and the local planning schemes should not weigh as heavily in the Tribunal’s consideration as the mandatory matters in s 94(3). Since, however, the Tribunal cannot be satisfied about the likely impacts on the local and regional economy, especially on other retail centres, with their concomitant effects, it cannot be satisfied about the weight that should be given to this factor. Related factors are also relevant to an assessment of the justification for the dMDP’s inconsistencies with relevant planning schemes. These were, after all, a key issue for the parties before the Tribunal.
There is much force in Kingston CC’s submission that the Tribunal was being asked to approve a dMDP which “does not now reflect the true nature of the operator who will conduct the retail activities and the components of the retail activities”; “is predicated upon development and use which is no longer certain”; and “includes an assessment of the effects of that proposed development which cannot be said with any certainty to be the ultimate outcome on the ground, if the dMDP were approved”.
For the reasons set out above, the Tribunal would not approve the dMDP.
Future needs of airport users, future airport operating capacity, environmental impact, and the views of Airservices Australia and CASA – s 94(3)(a), (b), (c) and (e)
Notwithstanding the conclusion stated at paragraph [255], given the way in which this matter was argued and, in case I am wrong, I propose to consider the dMDP on the basis that MAC would carry out the development that the dMPD detailed.
Pursuant to s 94(3)(a), (b), (c) and (e), the Tribunal must also have regard to:
·the extent to which carrying out the plan would meet the future needs of civil aviation users of the airport, and other users of the airport, for services and facilities relating to the airport;
·the effect that carrying out the plan would be likely to have on the future operating capacity of the airport;
·the impact that carrying out the plan would be likely to have on the environment; and
·the views of CASA and Airservices Australia, in so far as they relate to safety aspects and operational aspects of the plan.
The parties did not argue at the hearing that any of these matters constituted a reason why the dMDP should not be approved (save to the extent that any matter bore on the contention that the dMDP does not “relate to” the Airport, which I have dealt with above): see the Parties’ Agreed List at [2]. The evidence and material before the Tribunal showed that the Wesfarmers Project would not be likely to have any adverse effect on the future operating capacity of the airport or have any significant environmental impact. The advice from CASA and Airservices Australia was that the draft MDP raised no issues or concerns from a safety or operational aspect. There was, moreover, nothing to indicate that the Wesfarmers Project would have a deleterious effect on the future needs of civil aviation users of the airport, and other users of the airport, for services and facilities relating to the airport. Rather, there was evidence that the dMDP development would assist in meeting the future needs of civil aviation users and other users by providing an additional revenue stream to support future investment, particularly in aviation infrastructure, and provide additional services and amenities, particularly to airport employees. The Tribunal therefore has no occasion to differ from the parties’ agreed position.
Accordingly, there is no reason why the dMDP should not be approved, having regard to the matters specified in s 94(3)(a), (b), (c) and (e) of the Act (subject to the matters to which I have already referred).
Consultations undertaken in preparing the plan – s 94(3)(d)
Pursuant to s 94(3)(d), the Tribunal must also have regard to the consultations undertaken in preparing the plan, including the outcome of the consultations. The evidence and other material before the Tribunal showed that MAC acted in conformity with ss 92 and 93 of the Act, which included consulting the Commonwealth Department of Infrastructure and Transport and the Commonwealth Airport Building Controller, the Victorian Department of Planning and Community Development, a number of airport users and tenants as well as the public. At the time the dMDP was prepared, it complied with s 92(2) and included a statement in conformity with s 93(2).
There was a level of support for approval of the dMDP, as well as a level of opposition, significantly from Kingston CC (which informed the then Minister’s refusal to approve the dMDP). Importantly, however, in a letter dated 4 April 2013, the Victorian Department of Planning and Community Development, having consulted with the other relevant Victorian departments and agencies, was broadly supportive of the development proposed by the dMDP. The Department stated that it considered the “preliminary” dMDP “to be consistent with the land use strategies developed and approved as part of the 1999, 2004 and 2010 Master Plans” and “broadly aligned with the overall planning policy direction of the State Government”.
As joined parties, Kingston CC and Greater Dandenong CC have had an opportunity to present their views on the issues that concerned them. At this stage there can be little doubt that MAC has had due regard to these views, but that MAC and the joined parties have been unable to resolve their differences. As discussed above, the Tribunal received extensive expert evidence on the issues in contest between them.
Accordingly, on the basis of the development detailed in the dMDP, there is no reason why the dMDP should not be approved, having regard to the matter specified in s 94(3)(d) of the Act. Of course, if the Tribunal were to approve the dMDP, bearing in mind the evidence of Mr Ferguson mentioned above, it is probable that the development that MAC undertook would not be as detailed in the dMDP. In this event, the statutory purpose of ss 92, 93 and 94(3)(d) would be defeated.
No sensitive development – s 94(3)(f)
Pursuant to s 94(3)(f), the Tribunal must have regard to certain specified matters if the dMDP relates to a sensitive development. The parties agreed that the dMDP did not relate to a sensitive development; and there was no evidence to the contrary before the Tribunal: Parties’ Agreed List at [3]. I accept, therefore, that the dMDP does not relate to a sensitive development; and there is no occasion to have regard to the matters identified in ss 94(3)(f)(i), (ii) and (iii).
Non-mandated relevant matters – s 94(4)
As noted earlier, s 94(3) does not provide an exhaustive list of the matters to which the Minister may have regard in making a decision under s 94(2) of the Act: see s 94(4). The Tribunal may also have regard to other relevant matters besides those set down in s 94(3).
As noted at the outset of this consideration, the core of the Councils’ cases was that, if the Tribunal had regard to certain matters identified in ss 91(1)(ga) and 91(4) (as it should), then it would affirm the Decision under review. The matters clearly in contest were: (1) the likely effect of the proposed development on the local and regional economy; (2) how the proposed development fits within the local planning schemes for commercial and retail development; and (3) the extent of consistency with the schemes and the justification for any inconsistencies. The parties also addressed the other topic to which s 91(1)(ga) directs attention – traffic flows at the airport and surrounding the airport, although there was little contest over this matter.
The Tribunal turns to this latter matter first, since it was the subject of some limited evidence. Consideration of this matter confirms that there is no reason why the dMDP should not be approved, having regard to the traffic flows at the airport and surrounding the airport.
The likely effect of traffic flows
The likely effect of the development proposed by the dMDP on traffic flows at and surrounding the airport was the subject of the two expert reports and the evidence at the hearing of Mr Kiriakidis, discussed above. Mr Kiriakidis was a qualified engineer with some 17 years’ experience in traffic and transport planning. As indicated above, his first report stated, amongst other things, that the development was likely to have a marginal impact on existing traffic flows at and surrounding the airport, and that the future impacts would be influenced more by future land use patterns and infrastructure changes than the dMDP development. His supplementary report concluded that the impacts of the dMDP development and Costco Project were acceptable from a traffic and transport engineering perspective. During the hearing, he prepared a document outlining additional traffic volumes associated with the dMDP development and the Costco Project at the intersection of Centre Dandenong Road and Boundary Road.
Considered overall, Mr Kiriakidis’ evidence justified the parties’ agreement that the Tribunal could be satisfied that the likely effect on these traffic flows was not a reason why the dMDP should be refused. There was, as Kingston CC noted, a variation in estimated traffic volumes between Mr Kiriakidis’ supplementary report and the additional information provided by him. As Kingston CC acknowledged, however, it had only “nominally raised the issue of traffic [and] it [did] not contend that traffic issues cannot be resolved by appropriate responses”. Further, as MAC noted, the need for additional traffic volumes to be accommodated by enhanced infrastructure provision was not put to Mr Kiriakidis and there was no evidence to support the proposition that additional infrastructure beyond that nominated in the Costco MDP or the dMPD was required.
In closing submissions, Kingston CC also referred to the fact that there was no transport modelling in evidence, and, bearing in mind the Minister’s approval of the Costco MDP, with concomitant additional traffic, this may be a matter for some concern. This observation also relates to the absence of any net community benefit (NCB) test analysis – an issue of significance in assessing the extent to which the dMDP was consistent with the Council’s planning scheme.
As already stated, I accept that the traffic flows at and surrounding the airport is not a reason why the dMDP should be refused.
The likely effect of the proposed development on the local and regional economy and community
The evidence of the economic experts was that the proposed development would result in an increase in available jobs in the local and regional economy. Dr Spiller’s evidence was that any employment generated by the proposed development was likely to be transferred from elsewhere. His opinion was not shared by the other witnesses. Mr Ganly’s evidence was the proposed development would result in an increase of 392 net jobs in the local economy and community and 323 net jobs in the regional economy and community. This was, however, only a marginal increase of close to 1% in retail trade jobs. Mr Fuller also considered that there would be some job creation, although he did not contend that it would exceed Mr Ganly’s estimate. Mr Duane agreed that there would be a net gain in jobs, but stated that, at less than 0.1 per cent of the total jobs in the regional economy, he did not regard the increase as significant.
The Tribunal finds that there is likely to be an increase (even if not significant) in net employment in the local and regional economy at both the construction and operational stages of the proposed development.
The proposed development would provide an increased level of competition and choice for local residents and workers, including employees at the Airport. Apart from statements by Mr Ganly regarding the undersupply of discount department stores and supermarkets in the Westfield Southland trade area, there was limited evidence that there was a demand at the Airport site for a retail development of the kind proposed.
As discussed earlier, the economic experts gave evidence about the likely effect of the proposed development on other local and regional retail centres. Mr Ganly’s evidence was that, assuming the proposed development would have a 20%-25% impact on sales at the supermarket in Dingley Village, this would have a negative impact on the supermarket and other nearby businesses, as well as resulting in some job losses. Mr Ganly also agreed that if instead of Coles, Woolworths were to open a supermarket as part of the development, then that would have an adverse effect on the supermarket at Dingley Village, which he agreed would probably then be “run at a lesser level of service just to keep the market share”. Mr Fuller’s evidence was that neither the proposed development nor the Costco Project would result in the short-term closure of other retail centres. Mr Duane estimated that the impact of the proposed development on Dingley Village in 2016/2017 would be a 20% decrease in that centre’s sales and that, whilst the supermarkets at Dingley Village and Thrift Park were unlikely to close, the proposed development would adversely affect reinvestment there. The centre at Thrift Park would, on his analysis, suffer significantly but to a lesser degree than Dingley Village.

Mr Fuller, like Mr Burman, contributed to the URS Report, which was commissioned by the Department. The URS Report was not prepared for the Tribunal proceeding and with regard to the Tribunal’s Guidelines for Persons Giving Expert and Opinion Evidence (Guidelines). As already indicated, Mr Fuller did not persuade me that he had the same level of detailed knowledge about matters relevant to this proceeding as Mr Ganly and Mr Duane. I would not, therefore, give the URS Report or the evidence of Mr Fuller as much weight as that of the Mr Ganly and Mr Duane. See also Guidelines at [6] and Re Heaney and Commissioner of Taxation (2013) 138 ALD 144 at 167 [101].
Mr Ganly’s opinion that increased competition might result in reinvestment in Dingley Village was not supported by empirical evidence. In this and some other respects, the Tribunal finds that Mr Ganly’s evidence was of limited assistance. Mr Duane’s evidence was well supported by analysis and had close regard to the local and regional economy and community. Other experts, such as Mr Barlow, also dealt with his evidence on this basis. Mr Barlow’s evidence on the effect of the proposed development on Dingley Village was generally (though not entirely) consistent with that of Mr Duane. Where Mr Ganly’s evidence was materially inconsistent with that of Mr Duane, the Tribunal preferred the evidence of Mr Duane.
The Tribunal finds that the dMDP development is unlikely to result in the immediate closure of any particular centre or facility, although the proposed development would be likely to have a significant adverse effect on the supermarket-based centre at Dingley Village and an adverse effect on the supermarket-based centre at Thrift Park. Whilst the supermarkets at these centres would be unlikely to close, nonetheless closures of other business would be likely at Dingley Village. The proposed development would discourage reinvestment at both Dingley Village and Thrift Park. The Tribunal accepts Mr Duane’s evidence that the approval of the Costco Project and the dMDP proposal would exacerbate the position for Dingley Village and Thrift Park.
Bearing in mind the Experts’ Joint Statement and the evidence before the Tribunal, the Tribunal finds that the proposed development would be likely to result in an increase in vehicle kilometres travelled, although the extent of the increase is uncertain and may be insignificant.
So far as the likely effect of the proposed development on the local and regional economy and community is concerned, the Tribunal has considered the evidence of the economic experts, together with that of the town planning experts discussed next, and concludes that the positive impact on employment and the provision of additional services is offset by the likely negative impact on Dingley Village and, to a lesser extent, Thrift Park. For this reason, the likely effect of the proposed development on the local and regional economy and community is a neutral factor in deciding whether or not the dMDP should be approved or refused. Because of the uncertainty surrounding the likely increase in travel, the Tribunal does not give this negative factor much weight.
Consistency with the local planning schemes
Under this heading, it is convenient to deal with two issues: (1) how the proposed development fits within the local planning schemes; and (2) the extent of consistency with the schemes. The Tribunal accepts that, as MAC and Kingston CC agreed, the dMDP will be relevantly “consistent” with a planning scheme if it is not “antipathetic” or “contradictory” to, or “discordant” or “incompatible” with, that scheme.
The planning experts mostly agreed that there was a level of inconsistency between the Kingston PS and the dMDP. The evidence before the Tribunal indicated that the Greater Dandenong PS was relevantly the same. The Tribunal has not found it necessary to resolve the extent to which the Greater Dandenong PS should be borne in mind, since the issues relating to both planning schemes were broadly the same.
As noted already, Mr Barlow and Mr Milner agreed that the Kingston PS contemplated that single purpose retail developments would be located in existing and proposed activity centres and that the Airport was not a nominated activity centre: see Experts’ Joint Statement. As indicated earlier, they enlarged on this inconsistency in their reports and in oral evidence at the hearing. Whilst Dr Spiller was primarily concerned with the nature of the NCB test, his evidence was not inconsistent in this regard with the evidence of Mr Milner and Mr Barlow.
I prefer the evidence of Mr Milner and Mr Barlow on the issue of inconsistency to that of Mr Burman since it was apparent that Mr Barlow and Mr Milner had a clearer recollection of the relevant Victorian planning scheme provisions than Mr Burman, who at the time of the hearing was employed as a town planner in South Australia. Furthermore, the URS Report, to which Mr Burman contributed, was commissioned by the Department. It was not prepared for the Tribunal, having regard to the Guidelines. As indicated above, this diminishes the weight the Tribunal would accord the URS Report.
Accordingly, subject to the following discussion, I find that the dMDP was inconsistent with the Kingston PS in so far as the planning scheme had a preference for retail developments to be located in designated activity centres, which the Airport was not. In so far as relevant, as indicated above, it would follow that, for the same reason, the dMDP was inconsistent with the Greater Dandenong PS.
Mr Barlow and Mr Milner disagreed, however, on the extent of this inconsistency, partly because they took different views about the effect of Plan Melbourne. Both Mr Barlow and Mr Milner agreed that, by the time of the hearing, planning authorities like Kingston CC and Greater Dandenong CC were bound to have regard to Plan Melbourne in their decision-making. The Tribunal accepts this evidence. Mr Barlow considered that Plan Melbourne had effectively removed the hierarchy of activity centres and most of the restrictions on them. Mr Milner and Dr Spiller disagreed, holding to the view that Plan Melbourne was no more than a refinement on pre-existing policy and that the activity centre hierarchy remained important.
Furthermore, Mr Barlow considered that, in according the Airport the status of a transport gateway, Plan Melbourne gave weight to the fact that the Airport could accommodate a range of activities besides its transport function. Mr Milner, on the other hand, considered that the Airport’s transport gateway status referred primarily to its transport role.
It is unnecessary for the Tribunal to resolve the difference of opinion between Mr Barlow and Mr Milner (and Dr Spiller) as to the significance of Plan Melbourne. It is enough first to observe that Plan Melbourne was significant in that it showed how the Airport fitted within the local planning schemes. The Airport fitted into Plan Melbourne (and through the hierarchy of planning instruments into the planning schemes) as a transport gateway. Secondly, it is enough to observe that the experts agreed that Plan Melbourne effected some relevant changes, which lessened to some extent the significance of the hierarchy of activity centres and, in turn, the degree of inconsistency between the dMDP and the planning scheme. The important point is, however, that Plan Melbourne did not entirely remove this inconsistency.
Both Mr Barlow and Mr Milner agreed that the Kingston PS allowed for retail and commercial development outside the nominated activity centre network where the proposed use or development was of net benefit to the community in the region served by the proposal. They agreed that the NCB test required the positive impacts of a development proposal to be weighed against the negative impacts of the proposal.
In assessing the NCB, Mr Barlow focussed on the economic impact of the proposed development. In his opinion, the positive benefits were an improved level of service, competition and convenience, whilst the negative impact was the effect on Dingley Village, where the supermarket was the chief indicator. Although Mr Barlow’s expertise was as a town planner, rather than an economist, his evidence, it may be recalled, was to the effect that a 10% loss of retail turnover was acceptable; 15% was concerning; and at 20%, a centre would struggle to fulfil its previous role. Mr Barlow’s evidence in this regard was broadly consistent with the evidence of Mr Duane (although Mr Duane expressed the view that 10-15% was a high impact and over 15% was a very high impact); and, having regard to his evident practical experience, the Tribunal accepts Mr Barlow’s evidence as to “rule of thumb” indicators. As Mr Barlow said, based on his review of Mr Duane’s findings, if the Tribunal accepts Mr Duane’s evidence, then some traders at Dingley Village would be likely to be adversely affected by the proposed development and to close their businesses, even if the supermarket continued to trade. This was consistent with Mr Duane’s evidence, although the Tribunal notes that Mr Barlow did not consider any other centre to be at risk because of the proposed development. As already stated, however, the Tribunal accepts Mr Duane’s evidence regarding Thrift Park, noting that the expertise of Mr Barlow (a town planner) and Mr Duane (an economist advising retail developers and retailers) was relevantly different. For this reason, on this point, the Tribunal prefers the evidence of Mr Duane.
Mr Milner regarded Mr Barlow’s NCB analysis as too narrow, although Mr Milner agreed that, regardless of the exact economic impact (which he did not consider he was qualified to assess) the proposed development was likely to affect Dingley Village most severely and that this could be seriously detrimental for the neighbouring community. Mr Barlow’s and Milner’s evidence on this issue was supported by the evidence of Mr Duane, which the Tribunal has accepted. At the same time, as we have seen, Mr Milner acknowledged that the proposed development would have the merits identified by Mr Barlow and promote additional investment, short and long term jobs and land development. Mr Milner also identified a greater range of negative considerations, including issues affecting transport, disaggregation of retail facilities, an inappropriate urban design response, and a failure to provide smaller convenience retailing for the Airport workforce. Dr Spiller’s evidence also supported a more broad-based assessment of NCB.
Mr Barlow and Mr Milner also disagreed on the effect of the Costco Project. Mr Barlow did not consider that its effect on the matters in issue was likely to be significant. Mr Milner, with whom Dr Spiller agreed, considered that the Costco Project weakened the argument for the dMDP development, effectively because the Costco Project would provide the very same benefits as the dMPD development but with less negative impacts. The evidence of Mr Milner and Dr Spiller was consistent with the evidence of Mr Duane concerning the impact of the Costco Project, which the Tribunal has accepted.
It is convenient to note at this point that the Tribunal is cognisant of Dr Spiller’s expertise regarding the nature of the NCB test, but did not find his evidence as helpful as that of Mr Milner and Mr Barlow in this case. Dr Spiller’s evidence was at a more theoretical level than either of the other two witnesses. His approach to the issue of the employment generated by the proposed development was an example of this. This is not to say Dr Spiller was wrong; rather it is to say that his approach offered less assistance than other expert evidence in the circumstances of this case. Further, it may be recalled that Dr Spiller considered that it was not useful to define the local or regional economy because a NCB analysis required the identification of the merits and demerits of a development on a national or State-wide basis; and partly for this reason he did not attempt to define the local or regional economy and community. This was not an approach favoured by the other planning or economic experts and it did not assist in the present enquiry, in so far as its relevance substantially depended on the terms of s 91(1)(ga)(iii), directing attention to the local and regional economy and community. The Tribunal also notes that Dr Spiller had not analysed the 2010 Master Plan for the purpose of his report and treated the location of the development at the Airport as a neutral factor.
The Tribunal acknowledges that its findings as to the positive impact of the dMDP development on employment and the provision of additional services would be relevant in a NCB analysis. So too would its findings about the likely negative impact of the proposed development on Dingley Village and Thrift Park. The Tribunal’s finding that approval of the Costco Project and the dMDP proposal would exacerbate the position for Dingley Village and Thrift Park would also bear on a NCB analysis.
Further, if it were necessary for the Tribunal to decide the proper character of a NCB analysis, the Tribunal would accept the evidence of Mr Milner as to its broad-based character. There are, however, two reasons why it is unnecessary to do so. First, the issues in contest concerned only the economic impacts and there is insufficient evidence before the Tribunal to consider and assess other factors that might be important in an NCB analysis. Secondly, as the town planning experts acknowledged, none of them had in fact made a NCB analysis that would meet the requirements of the planning scheme. Indeed Dr Spiller stated that he could not perform a NCB analysis without additional information, including transport modelling. In these circumstances, the Tribunal cannot be satisfied that the proposed development would satisfy the NCB test so as to reconcile the dMDP with the planning scheme’s preference for a retail development of the kind the dMDP proposes to occur at designated activity centres.
Justification for any inconsistencies
As already noted, in specifying a proposal, s 91(4) of the Act not only required that the major development plan address the extent of consistency with planning schemes but also that it indicate the justification for the inconsistencies. The evidence to which reference has already been made is relevant to the issue of justification that the parties agree should also be considered in the present context.
The matters that justify the inconsistencies include the following:
(a)the Airport is on Commonwealth land and subject to the Act, the Lease and the 2010 Master Plan;
(b)the Airport is not governed by the Kingston PS or any other State planning scheme;
(c)the Kingston PS does not allocate a zoning to the Airport site;
(d)Plan Melbourne identifies the Airport as a “State significant Element – Transport Gateway” and, as such an “economic and employment centre[]”, providing “a significant economic and employment-generating role”;
(e)the 2010 Master Plan is effectively the primary planning instrument for the Airport and establishes a planning framework for the use of land at the Airport site;
(f)The dMDP is not only consistent with the objectives of the 2010 Master Plan, but it is also the kind of development that the 2010 Master Plan contemplates as facilitating its strategic plan and purposes;
(g)commercial development of the kind proposed by the dMDP is essential to the continued operation of the Airport and would provide an important income base to support investment in aviation infrastructure to ensure the ongoing viability and growth of the Airport and aviation activities at the Airport;
(h)there is likely to be an increase (even if not significant) in net employment in the local and regional economy at both the construction and operational stages of the proposed development;
(i)the proposed development would provide an increased level of competition and choice for local residents and workers, including employees at the Airport; and
(j)the proposed development is unlikely to result in the immediate closure of any particular retail centre or facility.
Considering these matters as a whole, the Tribunal does not consider that issues of ‘fit’ and inconsistencies with the Kingston PS would be a reason to refuse to approve the dMDP (assuming that the Wesfarmers Project remained viable). There is no evidence to indicate that the Tribunal would reach a different conclusion as regards the Greater Dandenong PS.
SUMMARY
As already indicated, however, it would defeat the purpose of s 94(2) of the Act and of a major development plan if the Tribunal were to approve a dMDP notwithstanding that, at the time approval was given, the evidence was that the airport-lessee company was not in fact able to implement the dMDP in accordance with the details of the plan and, as here, there was no evidence that it was likely that the airport-lessee company would be able to implement the dMDP, if approved, in accordance with those details in the near future. Mr Ferguson’s evidence was, in effect, that MAC would not be able to implement the major development plan in accordance with the detailed outline of the development in the dMDP and the details that the major development plan was supposed to establish; and there was no evidence that it was likely that MAC would be able to implement the development, if approved, in accordance with those details in the near future. As already stated, for this reason alone, the Tribunal would not set aside the Decision under review and would not approve the dMDP. There was, furthermore, another factor that told against approval: for the reasons explained above, the uncertainties about any retail development that might now proceed given the failure of the Wesfarmers Project meant that the Tribunal cannot be satisfied about the likely effect of the proposed development on the local and regional economy and community, especially the economic impacts on other retail centres and facilities in those communities, with their concomitant effects.
Accordingly, pursuant to s 43(1) of the AAT Act, the Tribunal affirms the Decision under review.

301 I certify that the preceding 300 (three hundred) paragraphs are a true copy of the reasons for the decision herein of Justice Kenny, Presidential Member

……………[sgd]………............................
Associate
Dated: 17 February 2015

Dates of Hearing

18, 19, 25 and 26 August 2014

Date of Last Submissions

22 September 2014

Date of Decision

17 February 2015

Counsel for the Applicant

Mr Richard Niall QC and Ms Emily Porter

Solicitor for the Applicant

Mr Cain Sibley

Clayton Utz

Solicitor for the Respondent

Mr Michael Palfrey

Sparke Helmore

Solicitor for the Joined Party

City of Greater Dandenong

Mr Barnaby McIlrath

Maddocks

Solicitor for the Joined Party

Kingston City Council

Mr Ragu Appudurai

Russell Kennedy

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2013/4302
Re	Moorabbin Airport Corporation Pty Ltd
APPLICANT
And	Minister for Infrastructure and Regional Development
RESPONDENT
And	Kingston City Council
JOINED PARTY
And	City of Greater Dandenong
JOINED PARTY

Dates of Hearing	18, 19, 25 and 26 August 2014
Date of Last Submissions	22 September 2014
Date of Decision	17 February 2015
Counsel for the Applicant	Mr Richard Niall QC and Ms Emily Porter
Solicitor for the Applicant	Mr Cain Sibley Clayton Utz
Solicitor for the Respondent	Mr Michael Palfrey Sparke Helmore
Solicitor for the Joined Party City of Greater Dandenong	Mr Barnaby McIlrath Maddocks
Solicitor for the Joined Party Kingston City Council	Mr Ragu Appudurai Russell Kennedy